What data have told us about decentralized finance

This paper surveys the growing empirical literature on decentralized finance (DeFi), emphasizing how protocol design and incentive structures shape economic outcomes in blockchain-based financial systems. We review evidence on tokens, decentralized exchanges, lending platforms, yield farming, derivatives, governance, infrastructure, and regulation. Across these domains, research highlights mechanisms of liquidity provision, price discovery, leverage, systemic fragility, and investor behavior, as well as vulnerabilities stemming from arbitrage frictions, liquidation dynamics, and maximal extractable value. We also examine the roles of audits, oracle networks, settlement mechanisms, and transparency tools in substituting for traditional oversight. The findings indicate that DeFi replicates many functions of traditional finance while introducing new risks linked to pseudonymity, smart contracts, and composability. The survey concludes by outlining open questions for research and policy on market efficiency, governance, systemic risk, and long-term sustainability.